Secured debts cannot be included in an Individual Voluntary Arrangement (IVA). If a charging order has been issued against your property it means that this debt has now become secured and it cannot be included in this type of debt solution.

Having said that the solution can still help if a Charging Order has been issued because it will allow you budget for payments towards the debt so that it is paid off.

In addition the Arrangement can help prevent a an Order being issued in the first place. We explain how this works.

How can an IVA help if you have an existing Charging Order?

If one of your creditors has already got a charging order against your property you should make monthly payments towards the associated debt so that it is gradually repaid.

In this situation it is possible to include the required amount you to pay towards the debt each month in your monthly IVA living expenses budget. If not do not do this and the required payments are not made you could risk the creditor taking further action and trying to force the sale of your property.

If you have not been asked to pay a specific amount towards the debt each month it is still sensible to make an allowance in your expenses budget so that a reasonable payment can be made. However if such a payment is not required, it may not always be agreed as a reasonable living expenses item.

BMD Tip: If one or more of your creditors has already taken a charge against your property it is too late to change this even if you start an IVA. However if they are currently only threatening to apply for a charge against your property starting an Arrangement will stop any risk of this happening.

Do you want to start an IVA to protect your home from Charging Orders? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Can an IVA prevent a Charging Order from being issued?

One of the advantages of the IVA solution is that once in place your unsecured creditors are not allowed to take further legal action against you or your property.

If one or more of your creditors are threatening you with legal action for example by trying to issue a CCJ (County Court Judgement) against you or Charging Order against your property starting the Arrangement will protect you

The reason for this is once the agreement has been made with your unsecured creditors they are no longer allowed to take out any further legal action against you in regard to collecting their debt. This is the case even if the creditor who wants to apply for a charging order against your home did not agree.

If the majority of creditors agree the proposal meaning that it is accepted at the creditor meeting, then all are legally bound by it even if they were the ones who rejected.

Paying a Charging Order after IVA completed

If you have one or more charging orders against you property it is in your interest to pay off these debts as soon as possible. If you do this then when you come to sell your house the smaller the secured debts will be that have to be repaid. As a result you will be able to keep more of the equity in the property.

Once you have completed your IVA all of the money you were paying into the arrangement each month will be yours to do what you like with. If you chose you can then use this to pay more towards your secured debts allowing you to pay these off more quickly.

Ultimately completing the Arrangement means that you can put your unsecured debts behind you therefore freeing up cash to repay any secured debts you have much faster.